Taxes Management Act 1970 section 98C

Notification under Part 7 of Finance Act 2004

Section 98C sets out the penalties for failing to comply with the tax avoidance scheme disclosure requirements under Part 7 of the Finance Act 2004.

• Failures to disclose notifiable tax avoidance schemes attract daily penalties of up to £600 per day during the initial period, with the possibility of escalation up to £1 million where the standard maximum is inappropriately low
• The disclosure duties cover a wide range of obligations including promoters' duty to notify HMRC, clients' duties to pass on reference numbers, employers' duties to report employee involvement, and duties to respond to HMRC enquiries
• Penalty amounts take into account deterrence, fees received by promoters, and tax advantages sought, and can be increased following orders resolving doubt about notifiability or requiring disclosure
• Separate penalties apply for failure to include scheme reference numbers on tax returns — up to £5,000 per scheme for a first offence, rising to £7,500 and then £10,000 for repeat offences within 36 months